Be Excellent - The Official Six Disciplines® Blog

Friday, March 19, 2010

Starting today (Saturday, March 20, 2010) - we're no longer publishing new blog posts here at the Be Excellent blog.

HOWEVER - we're not ending the blog - we're just moving our content. Since 2005, the Be Excellent blog has been offering the latest news and commentary on issues related to strategy, planning, execution, alignment, innovation and organizational learning. 400,000 visitors later, the Be Excellent blog continues to be a prominent business improvement blog that sees thousands of repeat visitors every month.

We'll be moving all 1,500+ posts - and we'll continue to publish new posts - at our new location www.SixDisciplines.com.

There, you'll find our blog and tons of new content - videos, forums, and a growing community of people just like yourself who are continually looking to improve their performance.

Come visit us at our new home: www.SixDisciplines.com/blog and make sure to change your RSS readers and favorite/bookmark our new blog location.

Almost 60% of high-performance organizations are adept at identifying and making needed incremental changes, versus only 35% of lower performers.

Nearly the same amount (58%) recognize and respond to strategic challenges in a timely manner, while only 30% of low performers do the same.

A little under half (49%) of high-performance organizations are proactive in anticipating and initiating the changes needed for sustained high performance, compared to only 20% of low performers.

BOTTOMLINE: "Most organizations understand the need for agility; what they don't understand is how to create a more agile culture. Our research and work with our member companies has uncovered some important findings about creating a corporate environment that doesn't just "manage" change well, but instead embraces change as a competitive advantage."

Research has determined that strategic thinking can be explained through seven dimensions:

A vision of the future

Strategic formulation and implementation

Managerial role in making strategies

Control

Managerial role in implementation

Strategy making

Process and outcome

Strategic thinking is extremely effective and a valuable tool, and requires developing skills in creativity, problem solving, teamwork, and critical thinking. The good news? It's a skill that can be learned.

Steps in building strategic thinking skills:

Critically examine and evaluate the existing situation. Understand what is being done, if it needs to be done that way, and fight hard against the "we've always done it that way" mentality.

Look at your business as a holistic system. Strategic thinkers view their businesses as a whole: its strengths, weaknesses, opportunities and threats.

Focus on the future. Strategic thinking is future-oriented. Before considering the viability of ideas, consider their potential contribution to the future of your organization.

Continuously ask for feedback from your customers. Strategic thinking cannot be effective if done in a vacuum.

Get realistic data for confirmation. Strategic thinking requires making predictions about the future and forecasts must be realistic. Gather reliable data to justify and confirm your predictions.

Align your thoughts to your organization. Review your organizational structure to determine if the organization and key leaders are in place to fulfill your vision, otherwise it's a pipe dream.

Be ready to consider change and unexpected challenges. Flexibility is a critical element of strategic thinking.

Strategic planning, on the other hand, is a continual planning process that relies on strong strategic thinking. When done correctly, strategic planning is not a one-time or annual event. It's an on-going process, reviewed quarterly, that affects the organization's initiatives, plans, and activities.

BOTTOMLINE: Both strategic thinking and strategic planning are important - even vital to your organization - and neither can be ignored.

(TIP: For more on strategic planning, search this blog for "strategic planning" - you'll find dozens of related posts, hints and tips are available to you!)

Monday, March 08, 2010

(The following post is authored by Eric Kurjan, President of Six Disciplines Ohio. Six Disciplines brings “big company” process improvement to organizations looking to jump beyond the status quo. For more information visit www.sixdnwo.com)

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Execution – The Fine Art of Getting It Done

In last month’s newsletter, I shared the key processes for building the strategy (see the original post here) . In this article I will share some of the finer points of bringing the strategy to life.

To start, the keys to a good strategy are found in the words, “Where”, “What” and “How”, which are an easy to remember summary of the Six Disciplines process for Disciplines I and Discipline II. However, it is the next words of “Who” and “When” which turn the plan into action. This is the crux of Disciplines IV – Work the Plan. This is where we need to engage the organization to do the “real work”. If we can get our employees focused on what is most important and measure the activities then the results will follow. The added benefit is that “who” and “when” are the cornerstones for creating a much higher level of accountability in the organization. The concept we are trying to create is that the work which is assigned is a contract between the Team Member/Employee and the company. In essence every quarter we are saying “I (name here) commit to do this work for Company X”.

Without a doubt, execution is the tougher, more critical side of the strategy/execution equation - getting it done, measuring progress along the way, and finding what doesn’t work early enough to make course corrections, are the steps to insure individual activities support the Vital Few Objectives (VFOs).

The best way to drive the execution of the strategy is to create a plan for the specific assigned work for each quarter of the year. We call this an Individual Plan or IP. The IP consists of two key components. First, the normal everyday tasks as described in your job description are called sustaining or “Run the Business” activities. Second are the tasks or activities which are intended to “Change the Business”. These are the date-driven tasks that are supporting the initiatives/projects which we have chosen to implement to truly change the direction of the company and support the key objectives (VFOs).

Here is an example of a simple Individual Plan:

This example of an “Individual Plan” breaks the work into the two key components of “Change the Business” and “Run the Business” activities. It also sets due dates, defines priorities and approximates the hours it will take to complete the tasks assigned. The “IP” also takes into account other activities like “Personal Development” and “Administrative Activities”. We include one more segment called the “Parking Lot” which is a staging area for tasks that you are not committing to complete this quarter but if time permits you might put some work into them.

The tendency for most people and organizations is to over-commit. Somehow everyone thinks they can achieve much more in a given timeframe. A critical component is to place a “Weight” or priority on the key tasks. The weighting allows you to be sure you are focused on those key items first. The weighting is not intended to represent the item with the most hours but the items that must get done. If trying to make a judgment on where to spend your time, the weight should dictate that decision. A second critical component is time or the “Hours”. This is the estimate of the hours required to complete the tasks in the IP. These hours may not be exact but they at least give a range of the required time. To gauge the workload we suggest you start with 520 hours per quarter (40 hours per week x 13 weeks). The hours may vary by role in the organization but it is a good spot to start.

In my example, Susan is carrying 632 hours for her Quarter 2 IP. That works out to be a little less than 50 hours per week which may be fine for Susan’s role. What we are looking for are unrealistic hours – both total hours and individual tasks that would cause Susan to be unable to fulfill her commitment, her “contract” for the quarter. Even the best plans need to have room for adjustment. Another important consideration is that since it is a “contract” between the employee and organization, the manager needs to sign-off on this contract too. To sign-off on the contract, the manager needs to agree with the tasks Susan plans to work on and that the hours are realistic. This also means the manager cannot add more work on Susan’s plan after the quarter has started. Although placing more work on employees is a very common occurrence it generally means that the original IP has little value and the “contracted” work will not be completed on time.

So how do we adjust for the changes that are likely to occur? First, we always recommend including a “catch-all” bucket called “Unplanned Time” to account for the unexpected. The second is that there is a trade-off. If there is work/tasks that are truly more important than what has already been assigned then something needs to be reprioritized, the date pushed out or the current task replaced/removed. This will be difficult for managers and leaders who are used to just coming up with “brilliant’ ideas and then dropping them on someone in the organization. Unfortunately, many of these “brilliant” ideas do not even fit within the objectives set in the strategy. So the IP actually helps prevent “brilliant” ideas from distracting the organization.

It is this lack of focus and commitment to the execution phase that kills most strategies. It is like cheating on your diet. If you remain true to the plan you will lose weight, if you cheat, you won’t. Living up to the contract by each person with an IP makes the strategy succeed. Execution is a simple concept, but hard to live by.

Tuesday, March 02, 2010

Eric Kurjan is president and owner of Six Disciplines Ohio/Indiana, with licensed Six Disciplines business coaches operating in both states. He's also the president of a private golf club (Findlay Country Club).

In this article, recently published in PGA Magazine, Kurjan offers his advice and explanation of the Six Disciplines methodology to PGA professionals.

Thursday, February 25, 2010

According to the latest results from the CEO Challenge 2010 Survey produced by The Conference Board, the critical issues of excellence in execution and consistent execution of strategy by top management once again remained at the top of the list.

If you're evaluating far more opportunities than your team can realistically handle, it's time to do a serious screening of those initiatives.

According to Robert W. Bradford, President/CEO of the Center for Simplified Strategic Planning, your organization should only take on between 3 - 10 strategic opportunities, depending on the size, breadth of your team and its resources. (We've found the fewer, the better.)

Bradford recommends a senior team exercise in which you simply ask the team to rate each opportunity on two dimensions – resource requirements and strategic impact on the organization.

For resource requirements, you may want to anchor the rating on a one to five scale. In a medium sized company, a one might indicate resources commensurate with an individual employee’s initiative – requiring little management of either manpower or money. A two could correspond with departmental level resources, a three with two or more departments, and a five would indicate a need for co-ordination of resources across the entire company.

For strategic impact, we used one for “nice to do”, three for “important” and five for “critical to our future”. Note that we do NOT rate on a purely financial basis, and in practice, opportunities with a strictly financial payoff were generally given a three impact rating – that is, a simple boost to profit is not enough to earn an opportunity high marks on strategic impact.

BOTTOMLINE: "If your organization is plagued by a surplus of incremental projects or “just do it” items that are overwhelming mid-level management, this approach to opportunity screening may give you one more way to rationally say “no” to things that will impede your strategic progress."

Tuesday, February 23, 2010

Scott Cleveland reported that a managing director of the Palladium Group (think: balanced scorecard) conducted a survey that compared two groups, one with and one without a formal strategy execution process in place.

A formal process in their terminology means "strategy maps, derived projects and process improvements from it, and associated key performance indicators (KPIs) with targets reported in scorecard dashboards and cascaded down into the organization."

The results?

70% of organizations WITH a formal process were exceeding the performance of their peers in their industry, while in contrast only 27% of those without a formal process were.

BOTTOMLINE: The overwhelming majority of businesses (and particularly, small and midsized organizations) do not have a formal process for strategy execution. They do not have strategy maps, derived projects, process improvements and associated key performance indicators (KPIs) with targets reported in scorecard dashboards and cascaded down into the organization.